Washington’s attempt to promote a global “war on terrorism” as the new rationale for its domination of Latin America ran into trouble last week at the meeting of the Defense Ministers of the Americas held in Quito, Ecuador.

US Defense Secretary Donald Rumsfeld failed to impose an accord that would have turned the Inter-American Defense Board into the hemisphere-wide coordinator of a US-led counterterrorism crusade.

Rumsfeld’s plan called for the creation of multi-national forces capable of intervening anywhere in the region. It envisaged the reinvigoration of many of the relations and policies that gave rise to brutal military dictatorships throughout most of Latin America from the 1960s until the 1980s.

During that period, the US forged the regional coordination of the hemisphere’s armed forces under the anticommunist umbrella of the 1947 Inter-American Treaty of Mutual Assistance, the so-called Rio Pact. That treaty invoked an alleged threat of “Soviet aggression” as the pretext for the Pentagon organizing a “collective security” system that was directed principally at suppressing any challenge from below to capitalism and US domination.

“The new threats of the 21st century recognize no borders,” Rumsfeld declared in his opening remarks to the military summit. “Terrorists, drug traffickers, hostage takers, and criminal gangs form an anti-social combination that increasingly seeks to destabilize civil societies. These enemies often find shelter in border regions or areas beyond the effective reach of government. They watch, they probe, looking for areas of vulnerability, for weaknesses, and for seams in our collective security arrangements that they can try to exploit.”

Rumsfeld went on to invoke the September 11, 2001, terrorist attacks in the US as the justification for breaking down constitutional barriers to the use of the armed forces in domestic policing and spying operations, a process that is already well advanced in the US itself.

“We have had to conduct an essential reexamination of the relationships between our military and our law enforcement responsibilities in the US,” he said. “The complex challenges of this new era and the asymmetric threats we face require that all elements of state and society work together. Our citizens depend on us to clearly define the roles, the missions, and the responsibilities of our various security forces.”

The US Defense Secretary also used the Quito summit to release a provocative report prepared at the request of the Pentagon by the Council on the Americas, a corporate-controlled think tank.

The central thesis of the report, entitled “Fostering regional development by securing the hemispheric investment climate,” is that the key to Latin America’s economic problems and the solution to the precipitous fall in foreign direct investment in the region is police-military repression.

It argues that foreign capitalist investors are bypassing Latin America because of a lack of “security,” and urges governments to consider “defense-related aspects of open market development.”

While highlighting the region’s murder and kidnapping rates, the underlying concern is clearly one of social unrest. “Now democracy in the region is troubled as citizens increasingly question the concrete benefits they can enjoy under democracy and economic orthodoxy, and populism regains a foothold.”

The document echoes Rumsfeld’s proposals, calling for the “consolidation of national security”—police and military—in the hands of the region’s defense ministers, and calling for “cross-border coordination.”

The contention that crime constitutes the principal cause of Latin America’s economic crisis is reactionary nonsense. There is no doubt that growing political instability and unrest have contributed to investors’ concerns about the region. However, this unrest is itself the product of economic policies implemented over the course of the last decades.

Largely, the fall in foreign direct investment is the logical outcome of the region’s governments already having privatized state enterprises, a process that led not to economic development, but rather to massive job cuts. In many countries, there is little left to privatize, while there is overwhelming popular opposition to continuing these fire sales of the region’s resources.

The Council on the Americas report strongly suggests that governments must take steps to suppress this political opposition. It states, “foreign investment, like electricity, will always seek the path of least resistance.” This “path” is best exemplified by China, the world’s greatest magnet for foreign direct investment, where working class resistance is met with police-state measures.

The call for an increased use of the military in internal policing has a grim precedent in Latin America. The so-called “national security” states forged in the name of the struggle against communism unleashed wholesale repression, killing, torturing and jailing of hundreds of thousands of workers, students, intellectuals and other perceived opponents of these US-backed regimes. Then, too, the coordination of repression between Washington and the Latin American regimes was termed a battle against “terrorism.”

In virtually every Latin American country, these crimes are still an explosive political issue. Publicly embracing Rumsfeld’s call for intensified use of the military against their own populations poses serious political repercussions for Latin America’s governments.

Brazil’s vice president and acting defense minister, Jose Alencar, delivered the most comprehensive rejection of Rumsfeld’s proposals. While scheduled to speak for five minutes, he spoke for twenty, including in his remarks a direct repudiation of the US invasion of Iraq. “The political cooperation which was built over a half a century, since the creation of the United Nations, made the unilateral use of force on the international stage a condemnable act,” Alencar said.

Alencar is a wealthy textile magnate and the leader of a right-wing party, who was brought into the government of Workers Party leader Luis Inacio “Lula” da Silva to reassure both Brazilian and foreign capitalists that Lula’s government would maintain International Monetary Fund-dictated economic policies. He speaks for a Latin American bourgeoisie that sees its interests increasingly at odds with those of US imperialism.

“Some favor the use of force ... to combat terrorism and the international proliferation of weapons of mass destruction,” declared Alencar, “while others, like ourselves, defend cooperation in combating structural threats, reflected in extreme poverty, hunger and the growth in inequality.”

Rejecting the call for turning the Inter-American Defense Board into a joint military command, Alencar said that Brazil believed it should remain merely an advisory body to the Organization of American States on technical-military questions.

Against the US proposal for a coordinated military response to “terrorism,” the Brazilian official stated, “It is natural and necessary that each state maintain the sovereign right to identify its own national security and defense priorities.”

Alencar likewise rejected Rumsfeld’s appeal for a greater use of the Latin American military in domestic operations. “The role of the armed forces is the defense of sovereignty and territorial integrity,” he declared, adding that it was the function of the “police forces and intelligence agencies of each country to prevent and combat terrorism and organized crime.”

The most concrete rejection of US policy came in relation to Colombia, where Washington has increasingly involved itself in the 40-year-old civil war between the government and rural-based guerrilla movements. Last month, the US Congress quietly doubled the number of US troops and military “advisers” deployed in Colombia to 800. Since 2002, Washington has provided Colombia with $3.3 billion in military aid.

The country’s president, Alvaro Uribe Velez, who also holds the post of defense minister, attended the Quito meeting. He appealed both for regional participation in the Colombian civil war and for the region’s governments to join in drawing up a list of “terrorist organizations,” whose members would be denied visas and subject to arrest. In particular, he wanted this policy applied to the two main left-wing guerrilla movements, the FARC (Revolutionary Armed Forces of Colombia) and the ELN (National Liberation Army).

Both proposals were explicitly rejected, with press reports describing Uribe as “visibly upset.”

While Ecuador’s president, Lucio Gutierrez, delivered an opening speech that seemed to lean towards Washington’s line on regional security—“solidarity between nations and peoples should allow us to build a new architecture of hemispheric security”—the country’s military made it clear they had no interest in getting involved in the Colombian conflict.

“Colombia’s problem is the Colombian people’s problem,” said Captain Jorge Gross, an Ecuadorian Defense Ministry spokesperson. “You cannot fight terrorism with terrorism.”

The final statement issued by the meeting included language that ran counter to the US project. “Each state has the sovereign right to identify its own national security and defense priorities,” it said.

“Conditions of human security improve with the full respect for dignity, human rights and fundamental freedoms, in the framework of a lawful state,” it continued. The statement added that security can only be achieved “through the promotion of economic and social development and the struggle against poverty.”

The evident willingness of Latin America’s governments to defy Washington’s dictates on regional security stems in no small part from the sense that US imperialism’s military is stretched to the breaking point in Iraq and its dollar is rapidly sinking on the world markets. In short, it no longer enjoys the hegemony that it once did in the hemisphere that US policymakers liked to refer to as “our backyard.”

Both Rumsfeld’s trip to Ecuador and President George W. Bush’s attendance at the APEC meeting in Santiago, Chile immediately afterwards were overshadowed by Chinese President Hu Jintao’s 12-day tour of the continent.

Hu, traveling with a delegation of 500 Chinese business and government officials, announced tens of billions of dollars in new investment contracts with Argentina, Brazil, Chile and Cuba in the course of the trip. The Chinese are primarily seeking access to the region’s raw materials and investment in projects—ports, railroads and telecommunications—aimed at facilitating their export to China.

Meanwhile, German Foreign Minister Joschka Fischer also made a trip to the region, meeting with Brazilian officials and businessmen in Sao Paulo last week, stressing that both Germany and the European Union are determined to forge a free-trade pact between Europe and the four-nation South American Mercosur trading bloc.

While US imperialism still enjoys overwhelming military superiority, its relative economic strength has declined sharply since the period when Washington forged its hemispheric security pacts in the name of a global struggle against communism. In those days, American capitalism accounted for two-thirds of global exports. Today, its share is less than 13 percent. These changed economic relations mean that the region’s ruling elites do not feel compelled to toe the US line on “terrorism.”